The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1887-11-22

who had the necessary powers in
connection with the loan, the terms
on which his principals were pre-
pared to negotiate 1t, and also the eX-
penses connected with it. The legal
ity of those eXpenseswa corroborated
by the lawyers in London. The omis'
sion of the two per cent in the books
of the Government was simply a
mistake. That was the only way
he could explain it when ask
ed in London. When the people
there took up the matter they con-
sidered it from the plain stand point
of the law. He believed Armstrong
to be an honest man. When he
went away he explained that there
would be five per cent. commission,
five per cent. expenses, and two per
cent. off, which was in accordance
with the usage of the London mar
ket. The position of the syndicate
was simply this: They said in effect,
1--WE bet five per cent. we will float
these bonds, and if we don't float
them we will take them ourselves at
five per cent" BY the law of the
stock board they could not subscribe
for bonds unless unable to dispose
of them. Therefore they used every
effort TO get these bonds subscribed.
AS matter of fact this syndicate
brought about twenty-one times the
subscription asked. They carried
out their contract, having done their
duty, there was now no syndicate.
If u number of these bonds had not
been subscribed for they would be
bound TO subscribe for them at five
per cent. That was the whole story
of the syndicate. The expenses of
floating this first loan were low for
a small country as little known as
Hawaii. We had Melted more than
had been secured by Japan, and the
Argentine Republic at their first APP
pearance on the London market.
After the subscribers had been allot-
ted their proportion the bonds were
placed upon the stock board, but
they could not reach that stage un-
less they were bona flde. He did
not believe but that these bonds
were hoated honestly, well managed
and could not have been managed
for less, although there was point
there. Had the syndicate been let
alone they would have brought the
bonds up to 10, but when they
reached 10S the telegram came say
ing, "don't sell any more bonds"
Dollar bonds had been issued in
London in very rare instances, but
they were not saleable. Armstrong
and Matheson had acted honestly
in every way, and it would be to our
interest to send forward these bonds.
If the instructions to our agents had
not been carried out, there was no
reason why we should punish the
widow and the orphan who were the
principal holders of the bonds now.
1t was said that England never in
terfered between debtor and credi-
tor, which was true when there was
disposition to do right; but Eng
land had interfered in the cases of
Turkey and Egypt. If the right
thing we're not done here England
would interfere. 1t might then cost
ten times f15 900 hereafter.
Mr.. Smith said there were three
questions to be considered-the
legal, the moral and the question of
expediency or policy. Legally, it
was unquestlonable that we were
not bound to deliver the bonds in
the form in which they were sent
out, because it was not in confor-
nifty with the Act. On the moral
question he had great doubt. AS
matter of policy, he had no doubt
that it would assume great import
ance if we should take any conrse
by which it would appear to disin-
terested people that we had acted
unwisely. 1t was almost certain
that we should have to borrow in
the future. Our rights had not been
trampled upon by anyone but our
financial agents. If we took any
course by which the bondholders
would have trouble the majority of
people would think we were in the
wrong. Our bonds would be stricken
off the list, and Hawaiian bonds
would come to be regarded, not
only in London, but elsewhere, as
dangerous things.
Continued on page 3,